Finding Sensible Strategies In Fickle Market

2021-09-07

Much like all the holiday barbecue bandits, the market acts like it is struggling to regain sensibilities and direction after a long weekend.

The market was mixed to start the week with the Nasdaq the only positive index, eking out a .06% gain to close at 15,372.33.

The Dow closed with a thump at 34,100.00 points to fall .76% (dropping 269.09 points on the day). The Nasdaq dropped 8.82 points while the S&P 500 tumbled .35% to 4,519.69 points.

Concern over unemployment payments ending, continued pandemic issues, and projections over lower U.S. GDP appears to be affecting market sentiment. Still, any immediate concerns don’t seem to be turning the overall direction of this continually rising bull market.

If recent action repeats itself, the bulls will be back on parade again with the next opening bell.

Two strategy focuses are circulating among Simpler’s traders.

Last weeks’ market appeared to show it was “just another week, another new high.” Some on Simpler’s team are focused on stock-specific setups that are showing strength and alignment to play well in a bull market.

Traders don’t want to “fight the tape” for long terms, but prudence in trading dictates this is a time to remain cautious and not get overextended on positions in an overextended market.

Other Simpler traders are managing this non-trending market (yes, it’s bullish, but not supporting a well-defined trend) by focusing outside stocks in a market that could break out at any time.

Having a mindset for futures can offer an advantage in a fluctuating market compared to the “stock picker” approach. Fluctuating action in the Dow and support only fueled by Big Tech in the Nasdaq make futures a prime target for many on Simpler’s team.

Whichever strategy a trader pursues, the key is to always refer back to the question, “How do you pay yourself and protect against any sudden turn to the downside?”

Stay nimble and adjust to what the market gives on any given day.